Irving David, 41, of Staten Island, New York, was named
in an indictment announced by the US Attorney’s Office in
Manhattan, which charged the former the controller,
treasurer and chief financial officer of the Consulting
Group Capital Markets Funds and controller of the
Smith Barney World Funds, with taking $72,870 in
checks intended to be deposited into the funds and putting
nearly $48,000 into his bank account, Dow Jones
reported.

David is charged with stealing the checks between
November 2000 and January 2003. Some of the checks had been
issued to fund shareholders to settle class-action
lawsuits, prosecutors said. David
was fired from the Citigroup Inc. unit in
January.

Mary Athridge, a spokeswoman for Citigroup Asset
Management, told Dow Jones that the company immediately
notified authorities when it discovered the misconduct
and continues to cooperate with law enforcement. In
addition, “any affected mutual fund has been reimbursed
in full,” she said.

David faces up to 30 years in prison and a $1
million fine on each of 15 counts of mail fraud and up to
five years in prison and a $10,000 fine on one count of
embezzlement, prosecutors said.

Civil Allegations

In addition to the criminal charges, David has also been
slapped with related civil charges by the US
Securities and Exchange Commission (SEC). The
agency also claims at the time he was embezzling from the
funds, David signed a certification under the
Sarbanes-Oxley Act in which he falsely stated that he
disclosed to the fund’s auditors and audit committee any
fraud, when in fact he had made no disclosure.

The SEC is seeking an order requiring David to give up
all illegal gains plus interest and penalties.